AMC Networks has bucked the downtrend during the past year and added about 15 million subscribers to its portfolio of U.S. cable channels.
“Those 15 million subscribers didn’t come by accident,” AMC Networks CEO Josh Sapan said Thursday during a conference call with analysts on the company’s third-quarter earnings. “We’ve had a lot of growth in the past 12 months.”
The growing number of new MVPD platforms has been a boon for AMC Networks, Sapan said. The company’s portfolio of five domestic cable channels is small enough and targeted enough to secure broad distribution on the startup OTT ventures from Hulu, YouTube, DirecTV and others. The subscriber growth is coming from networks other than the AMC flagship.
AMC posted operating income of $153 million on revenue of $648 million, in line with analysts expectations. Both were up substantially from the year-ago quarter when AMC missed analyst forecasts, took a $19 million write-down on canceled shows and saw a big drop in ad revenue for “Fear the Walking Dead.”
This time around, advertising revenues at the national networks wing — home of AMC, SundanceTV, WeTV, IFC and BBC America — was up 4.5% to $198 million and programming-related write-down was $8 million. AMC’s flagship series, “The Walking Dead,” did not air during the quarter.
AMC executives were pressed on the new initiative to offer premium 6-second commercial units in “Walking Dead.” AMC Networks COO Ed Carroll said “the idea has been received very warmly” by advertisers.
AMC’s international and other unit was a weak spot, posting a loss of $19 million on revenue of $113 million. The year-over-year operating loss increased $2 million. In his remarks, Sapan emphasized the importance of AMC’s growing international channel presence to allowing the company to make the most of its original series investments. On the same note, AMC’s increased investment in its AMC Studios arm is designed to allow the company to generate maximum return from international distribution and off-network licensing.
“Those two changes in our architecture are very important for our growing investment in our content,” Sapan said.